The crypto market has to be feathered properly and falls to a total market capitalization of 560 billion US dollars. Almost all coins are going down in the double-digit range.
The exact background of the Bitcoin news can only be speculated about now
If that is not Bitcoin news: The entire market for crypto currencies turns deep red on Tuesday, the 24-hour change rate of the individual coins moves between 10 % and 30 % in the minus area. Most heavily it meets with Ripple, Cardano, NEM and Stellar (ever -25% to -30%) straight the boom Coins of the last weeks. What all the Bitcoin news mentioned have in common is that they are supposedly cheap currencies that can be purchased for an amount below or around the one-US dollar mark (keyword pennystocks).
The market as a whole is falling considerably and can now only hold 560 billion US dollars. This is its lowest level since Christmas, when the price plummeted in the course of large profit releases in view of the public holidays. For the lead currency Bitcoin, the almost 12,000 US dollars on which the crypto currency has fallen today even represent the lowest value within a month. However, it should not be forgotten that this mark was the achievement of a new all-time high a month ago.
Really obvious external shock triggers are not discernible in the clarity with which it was partly possible in the past. However, there are a few clues that might take us in the right direction. Yesterday, for example, the usual bonuses paid to brokers at the beginning of the year took place on the American stock exchanges, which usually have a strong impact on market movements in the following days. A look at the trading volumes of CBOE and CME reveals that the Bitcoin futures were also affected by the increased speculation. For example, major investors may have bet on a fall in the Bitcoin price in order to hedge themselves against this or speculate specifically on it. This principle is also called hedging in stock market circles and enables profits to be realised both when prices rise and fall.
Another source of unrest could be China
Apparently, the Chinese government is planning to further restrict trading in crypto currencies and is against access by private servers to centralized trading. Above all, the focus should be on institutional investors with market power. The entire sector will therefore have to undergo a stricter examination – from central exchanges to investors to wallet providers. More precise steps have not yet been specified.
The extent to which both events influence the currently highly nervous market cannot be confirmed with absolute certainty. However, it does provide indications as to why this price slump is likely to be temporary.